Questions for Oral Answer

Questions to Ministers

Finance, Minister—Confidence

1. Dr DON BRASH (Leader of the Opposition) to the Prime Minister: Does she have confidence in the Minister of Finance?

Rt Hon HELEN CLARK (Prime Minister): Yes, because I know he will always put health, education, families, and superannuitants first—unlike the Leader of the Opposition.

Dr Don Brash: Can she confirm that in 1999 she promised that only the top 5 percent of taxpayers would pay a top rate of 39c in the dollar, and that as a result of Dr Cullen’s Budget many hard-working teachers and police officers are now part of the 20 percent of full-time workers who pay the top tax rate because they are part of Labour’s new rich, to whom the Government has denied any prospect of tax relief?

Rt Hon HELEN CLARK: I clearly recall the pledge that at the time the extra 6c was put on, it would apply only to people over a certain income. At that time it was 5 percent.

Rt Hon Winston Peters: How can the Prime Minister have confidence in a Minister of Finance who allows a board to take a State-owned, people-owned, taxpayer-owned asset and flog it off via the Cayman Islands, and when will that Minister be required to sack the board, as any responsible Minister would do in those circumstances?

Rt Hon HELEN CLARK: The assertion in the member’s question is quite wrong. Nothing has been flogged off, and I note that two such arrangements were entered into in 1996 and Mr Peters, as incoming Treasurer, did nothing to review it.

Dr Don Brash: Was the fact that Dr Cullen’s Budget provided for many taxpayers to receive a 67c per week tax break in 3 years’ time the “deep, dark secret” that the Labour Party president, Mike Williams, told the New Zealand Herald about, or was the fact that 20 percent of full-time workers, including many teachers and police officers, are now in the top tax bracket her Government’s “deep, dark secret”?

Rt Hon HELEN CLARK: What is clearly still a secret to the Leader of the Opposition is that under Working for Families, families on $25,000 to $45,000 a year will get another $95 to $100 a week in family support.

Rt Hon Winston Peters: Is the Prime Minister suggesting that an incoming Minister of Finance should break a contract entered into by a prior Government; if so, what did she do about the Overseas Investment Amendment Act, which she quite—according to the decision in England—illegally failed to present to the Governor-General for that person’s assent? Is that not the case under her administration?

Rt Hon HELEN CLARK: My understanding is that it was this Government that brought that into effect, not the member, who wanted it passed.

Dr Don Brash: Does the Prime Minister agree with the comments made by the Minister of Finance regarding comments made by Mike Williams, the Labour Party president, about a deep, dark secret in the Budget, that: “I think that what happened was that certain print journalists interviewed their own typewriters …”; if so, how does she reconcile this statement with a tape of the interview showing that Mr Williams clearly stated, unprompted: “There is some deep, dark secret in the Budget.”?

Rt Hon HELEN CLARK: The party president did say that. He also prefaced the comment by saying—and said, after having made it—that he did not have a clue what was in the Budget, and that was absolutely right.

Rt Hon Winston Peters: Which two deals signed by National in 1996 could I possibly have been responsible for?

Rt Hon HELEN CLARK: I have seen no evidence that the incoming Treasurer, after 9 weeks of negotiation, ever saw fit to review that practice by State-owned enterprises.

Rodney Hide: In light of the Prime Minister’s confidence in the Minister of Finance, will she ask him to explain to this House and to the public of New Zealand exactly what deal he signed off with Transpower through the Cayman Islands; if she will not do that, why not?

Rt Hon HELEN CLARK: The Minister issued a statement on 15 April, when there was first coverage of this matter, pointing out not only that the previous National Government had approved a similar arrangement but also that he had had to be confident that what was being proposed was legal in all jurisdictions at that time, and that he had received that assurance.

Rt Hon Winston Peters: Why is the Prime Minister seeking to mislead the public of this country by referring to important legislation to do with foreign ownership, when she had the chance to ensure that it went to the Governor-General but for 2 years made sure that it did not; would she please explain that and stop giggling?

Rt Hon HELEN CLARK: One can only laugh at some of these allegations. This Government, not that member, put that legislation to the Governor-General for signature.

Interest Rates—Reports

2. CLAYTON COSGROVE (Labour—Waimakariri) to the Minister of Finance: Has he received any reports on the level of mortgage interest rates?

Hon Dr MICHAEL CULLEN (Minister of Finance): [Interruption] That is more times than the member has managed. Yes, I am advised that mortgage rates have remained below 10 percent since December 1999. In the previous 9 years, mortgage rates were above 10 percent for 51 of the 108 months under a National Government.

Clayton Cosgrove: What has held mortgage rates below 10 percent since 1999?

Hon Dr MICHAEL CULLEN: There are many reasons, but one is changes to the monetary policy targets agreement that have made inflation targeting more flexible. We have also had much more supportive fiscal policy. But management failures occurred earlier. For example, in the 1993 election year the then Governor of the Reserve Bank, one Dr Don Brash, failed to tighten quickly enough, which subsequently led to a heavy tightening of monetary policy and very high mortgage rates.

John Key: Why was Westpac’s chief economist, Brendan O’Donovan, wrong when he said last week that $1 of tax cuts would be far less inflationary than $1 of increased Government spending?

Hon Dr MICHAEL CULLEN: Because unless the $1 of tax cuts is accompanied by $1 of expenditure decrease, then there is a fiscal loosening to that extent. If the member talked to Dr Brash he would find that, all else being equal, a looser fiscal policy equals higher interest rates.

Dr Don Brash: Can the Minister of Finance confirm that when the previous Governor of the Reserve Bank became governor in September 1988, the floating mortgage rate was 15½ percent, and that when he left that role it was 7½ percent?

Hon Dr MICHAEL CULLEN: I certainly can. Of course, when it was 15½ percent it was actually lower in real terms than it was when it was 7½ percent, when he left. But the fact of the matter is that during the 1990s, for nearly half of the 108 months the interest rates on mortgages were above 10 percent. When that man was in charge of monetary policy, he was known as the most hawkish Reserve Bank governor in the entire developed world.

Treaty of Waitangi—Education Programme

3. DAIL JONES (NZ First) to the Coordinating Minister, Race Relations: Is it Government policy for all Government-funded entities to provide education on the Treaty of Waitangi; if so, what has been the total cost in the last financial year for all internal courses, contracted courses, and education material on the Treaty of Waitangi?

Hon TREVOR MALLARD (Coordinating Minister, Race Relations): No.

Dail Jones: I raise a point of order, Madam Speaker. I take it that that was an answer to the first part of the question. I just ask the Minister to give some thought to the second part of the question, which he has had for at least 4 hours and ought to know something about as a Minister.

Madam SPEAKER: Are you asking a supplementary question?

Dail Jones: I just ask him to answer the question that has been set down on the Order Paper, which he has had for 4 hours. I read it out for your benefit, Madam Speaker. I said: “if so, what has been the total cost in the last financial year for all internal courses”—

Hon Dr Michael Cullen: The member asked whether something is true; if it is, then what? The member said no, it is not true, so the “if so” part becomes completely irrelevant at that stage.

Madam SPEAKER: Yes, I am afraid it can be read like that, so maybe the member would like to ask a supplementary question to that effect.

Dail Jones: In view of the fact that statements have been made that the Government will be spending $6.4 million over 3 years on education and suchlike through this Budget for that purpose, is the Minister denying that that money will no longer be made available because of various complaints that have been made to the Government by parties like New Zealand First?

Hon TREVOR MALLARD: I have noticed no complaint from New Zealand First on this matter.

Rt Hon Winston Peters: I raise a point of order, Madam Speaker. The Minister has just answered no to the first part of the primary question. Then, when asked about specific expenditure that has been publicised widely in the newspapers, he answered that he knew of no complaint from New Zealand First. He is being devious and obtuse, and he should be now told to answer the primary question. His answer must be “Yes”, because by way of his last answer, he has just admitted that there is some expenditure. If it is outside of Government policy, he can say so. But it surely must be part of Government policy, otherwise the Government would not be doing it.

Hon Trevor Mallard: The primary question states: “all Government-funded entities”. It states “all”. It is a very badly drafted question. As soon as I saw it, I said that there was no need for any additional information on it, because, clearly, all Government entities do not provide education in this area. It is just rubbish.

Madam SPEAKER: One of the difficulties is that when members ask multiple questions in supplementary questions, they are at risk of getting an answer to only one of them, which is all that is required under the Standing Orders. I suggest that the question was answered in this instance. If the member wants to have another supplementary question, then he should do so.

Rt Hon Winston Peters: I raise a point of order, Madam Speaker. The proper way the question would be answered in any other Western democracy would be for the Minister to say: “No, not all Government departments, but some, and here is the amount.”

Madam SPEAKER: Well—

Rt Hon Winston Peters: If one of all Government departments was not engaged in this, it does not mean that the question should not be answered. One department may not be engaged, which is quite natural in that case, but the fact of the matter is that some Government departments surely are. Why cannot the Minister just give us the answer, instead of trying to be a clever Dick, which does not come naturally to him?

Madam SPEAKER: I thank the member for that contribution.

Rodney Hide: Speaking—

Madam SPEAKER: No, I do not need any help with this. Thank you very much, Mr Hide. The question has been answered. If you wish to have different questions and different answers, then I invite the members, again, to have a reconsideration of the Standing Orders.

Gerry Brownlee: Has the Minister troubled himself to find out the total cost in the last financial year of all internal courses, contracted courses, and education material on the Treaty of Waitangi paid for by Government agencies?

Hon TREVOR MALLARD: No.

Rod Donald: Does the Minister agree that well-informed dialogue and honest information on the Treaty of Waitangi foster racial harmony in this country, and peace and understanding in our communities, or does he support the view that New Zealanders should remain ignorant of our origins as a bicultural nation?

Hon TREVOR MALLARD: The former.

Tariana Turia: Does the Minister recall the Prime Minister’s statement to this House on 11 February 2004: “I agree that the Treaty of Waitangi is the founding document for New Zealand and that it is a symbol of unity, trust, and partnership between Mâori and the Crown …”; if so, should not the Government continue to fund education on Te Tiriti o Waitangi in an effort to build unity through the founding document of this nation?

Hon TREVOR MALLARD: I do have a recollection of that, and, of course, if the Prime Minister said it, we will keep on doing it. I remind the member that there has been an announcement recently around information around the treaty campaign, and when she works her way through her papers she will come to it.

Dail Jones: Is it Government policy for some Government-funded entities to provide education on the Treaty of Waitangi; if so, what has been the total cost in the last financial year of those internal courses, those contracted courses, and that education material on the Treaty of Waitangi?

Hon TREVOR MALLARD: Clearly, a number of Government agencies and other Crown entities, including universities, are involved in education in that area. I have not seen fit to waste their time by asking the cost of all the individual courses.

Stephen Franks: What do those education courses teach is the meaning of the treaty, when I have not been able to get a single straight answer from a range of central and local government organisations when I have asked just what they expect job applicants to show when they are told they must show commitment to the treaty; would it not be a good idea at least for the Government to sort out its own message and ideas before the propaganda presses start rolling?

Hon TREVOR MALLARD: I am in two minds as to whether I should be giving advice to the member at this point on those matters—that is, job applications. I think it is clear that some Government agencies have been absolutely inappropriate in their suggested requirements for job applicants. A number of jobs that have nothing to do with the treaty have the treaty mentioned in the advertisement.

Hon Dr Nick Smith: What about your office?

Hon TREVOR MALLARD: I want to say that I am very embarrassed that Ministerial Services, when advertising a job available in my office, suggested that knowledge of the principles of the treaty was necessary. For an electorate secretary in my office such knowledge is absolutely unnecessary, and that should not have been in the job advertisement.

Dail Jones: How and why has the Minister forgotten launching a treaty information website, the first part of a campaign promised by the Labour Party before it came to power in 1999, and an information programme that will run for 3 years and has a budget of $6.47 million—how can he possibly have forgotten that; and in what way will that benefit any New Zealander, whether Mâori or non-Mâori, bearing in mind, in particular, that the Government’s 2005 Budget funding for Mâori is directed to agencies instead of families?

Hon TREVOR MALLARD: It has been quite interesting—there have been tens of thousands of hits on the Treaty of Waitangi information website at the State Services Commission. The information is presented in very neutral terms, and has been checked by eminent historians, including Jamie Belich and Dr Claudia Orange, for its neutrality. On this matter I tend to agree with the Greens that knowledge is better than ignorance, even if the member has the opposite point of view.

Gerry Brownlee: I seek leave to table a document in which officials question whether it is clear that any additional benefits are likely to be gained from the national touring exhibition, which is at a rather large cost to the Government.

Leave granted.

Dail Jones: In view of the Minister’s inability to come up with figures, as asked by me of him, I seek leave to table a New Zealand Herald article from 19 April 2004 indicating the budget of $6.4 million and the cost of the website, which the Minister seems to have forgotten does cost money.

Madam SPEAKER: Leave is sought to table that document. Is there any objection? There is objection.

Stephen Franks: I seek leave to table a letter from the Minister of Justice that tells me the treaty commitment is “to require that the ministry take into account New Zealand is a diverse society and that it should respect and seek to meet the needs of all New Zealanders”.

Leave granted.

Stephen Franks: I seek leave to table a letter from the Ministry of Defence that says the ministry has no formal statement of the principles of the treaty, but is committed to an equal employment opportunities policy.

Leave granted.

Stephen Franks: I seek leave to table letters from district health boards with a variety of equally empty responses.

Leave granted.

Research, Science and Technology—Support for Innovation

4. MARK PECK (Labour—Invercargill) to the Minister of Research, Science and Technology: How is the Government continuing to support innovation in the New Zealand economy, through research, science and technology?

Hon STEVE MAHAREY (Minister of Research, Science and Technology): The Government will invest an additional $204 million in research, science, and technology over the next 4 years. This increase will bring total public spending on research, science, and technology, excluding capital expenditure, to just on $600 million for 2005-06—a boost of over 56 percent since 1999. New funding over the next 4 years includes $71 million to increase the competitiveness of key industries, and $47.8 million for infrastructure and development programmes for researchers and scientists, and into the health area, which will undoubtedly help the member.

Mark Peck: What report has the Minister seen about the value of further investment in research, science, and technology?

Hon STEVE MAHAREY: I have seen a report that states: “We have no doubt that there is an important role for government in supporting strategic public good research, both in Crown Research Institutes and in universities. It is likely that we are still spending too little on such research …”. However, I have also seen reports of proposals to cut Government services across the board in order to finance tax cuts by Christmas, benefiting the better-off New Zealanders in our country. Both points of view come from Dr Don Brash. He cannot have it both ways.

Hon Ken Shirley: I raise a point of order, Madam Speaker. I draw your attention to Speaker’s ruling 145/5. Again, a Minister has been asked whether he has seen a report, and the Speaker’s ruling makes it quite clear that the Minister in responding cannot speculate or hypothesise on what another party’s polices might bring or deliver. That answer was a direct contravention of the ruling, and, unfortunately, we are seeing that repeatedly in this House.

Madam SPEAKER: Would the Minister withdraw that part of his answer, please.

Hon STEVE MAHAREY: I withdraw that part of my answer.

Mark Peck: Can the Minister give us a concrete example of an investment in research, science, and technology that will have a really positive impact on New Zealanders?

Hon STEVE MAHAREY: I can. This Government will invest an additional $70 million in health research, over the next 4 years. It will be the biggest funding boost in more than a decade, and will bring the total investment in health research to a figure double what it was when Labour came to Government. This in an example of our trying to correct the deficit left to us by the tax-cutting previous Government.

Land Transport—Auckland

5. JEANETTE FITZSIMONS (Co-Leader—Green) to the Minister of Transport: How much is the Government spending on land transport in Auckland this year and how does this compare with previous years?

Hon PETE HODGSON (Minister of Transport): About $405 million—more than ever before, and almost twice what the previous National Government spent in its last year in office.

Jeanette Fitzsimons: Is the Minister aware of any cities that have managed to “motorway” their way out of congestion?

Hon PETE HODGSON: No, and to quote a former Minister of Transport, Maurice Williamson: “I think it is important to realise that throwing dollars at the problem of roads is not the answer. Experience in the United Kingdom and the United States, and even here in Auckland, shows us this. Building more and more roads in congested areas on many occasions results in more congestion, more traffic jams, more time and money wasted, and more pollution.”

Hon Mark Gosche: To prove that point, how does the dollar value of transport infrastructure projects in Auckland this year compare with progress under National?

Hon PETE HODGSON: Major transport projects under way this year in Auckland total over $1.3 billion, compared with major projects under way totalling less than one-tenth of that amount under National in 1999-2000.

Hon Maurice Williamson: Can the Minister explain why trying to shut down public criticism of this Government’s poor track record in funding Auckland roads, such as his smart alec trick of—[Interruption] I thought questions were supposed to be heard in silence.

Madam SPEAKER: Yes, they are.

Hon Maurice Williamson: Oh, so there are two rules?

Madam SPEAKER: No, there are not two rules. I will ask the member to withdraw that. The constant interjections, the chatter, and the general level of noise are very difficult to control in this House. I ask all members to be quiet. That member himself chatters constantly throughout questions and is never pulled up. Now would the member please continue.

Hon Maurice Williamson: Can the Minister explain why trying to shut down public criticism of this Government’s poor performance and track record in funding Auckland roads, such as his smart alec trick of leaping in and registering a website name that the Employers and Manufacturers Association (Northern) was going to use to wage a public campaign to show just how underfunded Auckland roads are, benefits the poor, struggling motorists stuck in congestion every day of the week in Auckland?

Hon PETE HODGSON: This Government does not have a record of underspending; it has a record of record spending. But when the Employers and Manufacturers Association (Northern) decides to run a campaign against this Government, using misinformation as evidenced by all its design work, which was leaked, and if it is sufficiently amateurish to not bother to register its website before it has announced it, then it gets what it deserves.

Hon Dr Michael Cullen: Given the reference to the Employers and Manufacturers Association (Northern), can the Minister confirm that its spokesperson is the former Social Credit finance spokesperson, and that this is not going to be the means of financing new roads in Auckland under its proposal?

Madam SPEAKER: The member knows that the Minister has no responsibility for that.

Peter Brown: Will the Minister tell us categorically whether he recognises there is any merit whatsoever in the Allen report—that is to say, that efficient roading systems produce strong, sound, economic benefits for the country; does he acknowledge that at all?

Hon PETE HODGSON: I most certainly do, which is why expenditure on State highways in Auckland this year is running at more than twice what it was at the change of Government. I make another point: motorways alone cannot get us out of trouble in Auckland any more than they have in Los Angeles.

Deborah Coddington: Does he agree with the information given last week to himself, and to the Minister of Finance, Michael Cullen, on the construction of Auckland’s roading network—information given to him at a meeting by Labour Party president and Transit board member Mike Williams, who stated that: “Transit has started work on all roading projects that were ready to go as at March 2004.”, despite the fact that, according to Transit’s own information, nine major projects have not yet been started—and if he does not agree with that information, can he tell the House what the true situation is regarding the Auckland roading network?

Hon PETE HODGSON: Transit New Zealand offers New Zealand a 10-year plan, as does Land Transport New Zealand. They did so in 2004 and 2005, and they will do so in 2006. It is self-evident that a 10-year plan cannot all be started at once.

Keith Locke: What reports has the Minister seen on traffic congestion in Auckland?

Hon PETE HODGSON: Two recent reports: the first is on the success of walking school buses in reducing congestion; the second proposes to remove all school zoning, which, all by itself, would cause gridlock in Auckland, except in school holidays. The first is the result of the Government working together with the Greens. The gridlock comes courtesy of the National Party.

Jeanette Fitzsimons: Can the Minister confirm that the additional money for land transport in Auckland has helped to fund the double-tracking of the western rail line and further busways; and that those are proving much more cost effective than the now-defunct eastern highway ever would have been in reducing congestion?

Hon PETE HODGSON: Yes I can, and I can further say that in the life of this Government, 50 Aucklanders a week have made the shift to public transport. That figure is likely to increase.

Larry Baldock: Does the Minister agree that more progress could be made in Auckland if so many Green members were not constantly protesting over good road initiatives in the region and holding up, delaying, and adding extra to the cost of those projects that could alleviate some of the congestion in Auckland?

Hon PETE HODGSON: I am not aware of any Green protests in Auckland, but if the member has information I would be pleased to receive it.

Keith Locke: Has the Minister seen any reports of how the North Shore busway currently under construction will ease congestion and improve travel times for commuters?

Hon PETE HODGSON: The North Shore busway will have a remarkable effect on North Shore transport. Northern suburbs will soon have up to 40 percent more peak-hour bus services to choose from. The Auckland Regional Transport Authority, established by this Government, intends to add about 475 more trips per day. That represents a 28 percent daily boost to existing North Shore and Hibiscus Coast bus services.

Jeanette Fitzsimons: What reports has the Minister seen on plans to stop new spending on passenger transport, and what impact would that have in Wellington?

Hon PETE HODGSON: I have seen a report that transport spending should go only on roads. In Wellington that would lead in short order to a collapse of local rail and bus services, which carry around 30 percent of commuters, and it would therefore lead to instant gridlock. The report, of course, is another one out of the National Party stable.

Deborah Coddington: I seek leave to table a letter from Michael Barnett of the Auckland Regional Chamber of Commerce to Michael Cullen, setting out how the Transit board member Mike Williams had misled the meeting he was at, and, attached to that, a chart setting out when the actual projects had and had not been started.

Leave granted.

Hon Maurice Williamson: I raise a point of order, Madam Speaker. I need assistance from the Chair because we now have a Minister saying that the National Party has said it would stop all funding for public transport. I am the transport spokesman, I know what is on our website and what is in our press releases, and we have never at any stage said we would stop the money for public passenger transport.

Hon PETE HODGSON: Speaking to the point of order, Madam Speaker, I take the member at his word. If that is the case, I withdraw and apologise.

Madam SPEAKER: Thank you.

Transpower New Zealand Ltd—Minister of Finance's Statement

6. JOHN KEY (National—Helensville) to the Minister of Finance: Does he stand by his reported statement regarding Transpower’s $733 million structured finance deal that it is “difficult for Ministers to fully appreciate all the risks and benefits” without the same legal advice Transpower had received; if not, why not?

Hon Dr MICHAEL CULLEN (Minister of Finance): Yes.

John Key: Were the unknown financial institutions that took part in the Transpower structured finance deal banks or financial institutions that operate in New Zealand, and is it possible that they used this transaction to lower the amount of tax they would have otherwise been required to pay in New Zealand?

Hon Dr MICHAEL CULLEN: That is a matter on which the member will have to question Transpower rather than the shareholding Minister. What I do note is that Transpower said very clearly that, in terms of its own arrangements, it had increased the amount of tax that Transpower had to pay in New Zealand—and that was from Transpower’s spokesman, Wayne Eagleson, a person not unknown to the National Party.

Rod Donald: As the shareholding Minister, can he explain whether Transpower has assured him that it has addressed the risk to ownership of New Zealand’s transmission assets as a result of its cross-border lease arrangement; and could he please advise whether, if Transpower were to attempt its cross-border lease today, it would meet our Inland Revenue Department’s expectations, and whether the US party to this deal would meet the rules of the US Internal Revenue Service?

Hon Dr MICHAEL CULLEN: The principal question is not about the cross-border leasing deal, but about a structured financing deal—a quite separate arrangement that Transpower had. But I am assured by Transpower, and have been on a number of occasions, that the cross-border leasing deal does not affect the ownership of the assets.

John Key: In light of the answer the Minister of Finance just gave that I would have to ask Transpower, has he asked Transpower whether it has engaged in a structured finance transaction that is used by banks that operate in New Zealand to lower their tax liability; if he has not asked, why on earth has he not asked?

Hon Dr MICHAEL CULLEN: I have received the assurances from Transpower that I consider appropriate. It is not for Ministers to enter into the details of commercial arrangements that State-owned enterprises are engaged in.

Stephen Franks: Is the Minister telling us now that he cannot get the Transpower information in order to decide whether giving Aussie banks a tax break is a good idea, and is that because the Minister does not want to know, because, in my long experience of acting for such companies on tax-driven deals, if a 100 percent shareholder really wants to know something, it knows it by lunchtime?

Hon Dr MICHAEL CULLEN: One of the differences in the case of shareholding Ministers is that they have to be more conversant with and obey more closely the law than sometimes happens in the private sector. But in fact the only person who has suggested that the Australian banks are involved for a taxation arrangement was one Sue Newberry of Canterbury University, whose views on these matters are not exactly reliable.

John Key: Is it consistent with the State-owned enterprises’ requirement of “no surprises” for the Minister of Finance to have signed off a transaction by Transpower that may have reduced the tax liability of New Zealand banks, and for the Minister of Finance not to have inquired who the counter-parties were on the other side of the transaction?

Hon Dr MICHAEL CULLEN: Certainly, if Transpower had entered into an arrangement that had the effect of reducing the tax base within New Zealand, and did not give the Minister of Finance advice on that, I would regard that as inconsistent with the “no surprises” policy.

Gordon Copeland: Is the Government committed to Transpower remaining a profit-earning, dividend-paying State-owned enterprise, or has consideration been given to its conversion to a public utility with the sole objective of transporting electricity through the grid at the lowest possible cost to the consumer, in line with United Future’s policy?

Hon Dr MICHAEL CULLEN: On occasions, consideration has been given to whether Transpower should become simply a Crown company rather than a State-owned enterprise, but it would still have to meet commercial objectives in terms of return on capital, etc. Experience would suggest that if it does not have that degree of discipline upon it, it may quickly move into making large losses, which would make all the member’s tax promises completely impossible to achieve.

Rt Hon Winston Peters: Why on earth would a transaction go through the Cayman Islands if it was above board and legal, and if something devious was not afoot?

Hon Dr MICHAEL CULLEN: As far as I am aware, the structured finance deal did not; it was the lease-out - lease-back arrangement deal that did. I repeat what I have said on a number of occasions on that particular deal: given Ministers’ concerns that it might cause some reaction within the United States, specific assurances were sought from the United States Government that it was not seen as contrary either to the letter or to the spirit of United States—

Hon Dr Nick Smith: Still dodgy.

Hon Dr MICHAEL CULLEN: If the United States Government says it is not dodgy, who on earth are we to judge otherwise, as there was a net gain to New Zealand out of it?

John Key: I seek leave to table a copy of the Christchurch Press article this morning in which the ANZ National Bank and the Bank of New Zealand are reported as saying they are not denying involvement in the deal, and saying they will not comment for commercial reasons.

Madam SPEAKER: Leave is sought to table that document. Is there any objection? Yes, there is.

Modern Apprenticeships—Targets

7. NANAIA MAHUTA (Labour—Tainui) to the Minister of Education: What progress has the Government made towards its targets for getting more people into Modern Apprenticeships?

Hon TREVOR MALLARD (Minister of Education): Great progress. At the end of March there were 7,760 Modern Apprentices, on top of the 1,000 who have now completed their training. In Budget 2005 we have set aside an extra $5.9 million for an additional 500 Modern Apprenticeships.

Hon Dr Nick Smith: Only half of them finished.

Hon TREVOR MALLARD: Only half of them have finished because they have only just started, because the National Government abolished apprenticeships. What a dopey, dopey comment from Nick Smith—again! He is the person who wants to have Don Brash’s job. For goodness’ sake!

Nanaia Mahuta: Can the Minister outline how the Modern Apprenticeships scheme is helping to address skill shortages in key industries?

Hon TREVOR MALLARD: Our Government has invested nearly $70 million into the scheme since 2001. Modern Apprenticeships is filling a vital role addressing skill shortages in key industries. There are over 1,150 Modern Apprentices in the building and construction industry, over 900 in the electrical industries, over 1,200 in engineering, over 900 in the motor industry, and over 1,300 in agriculture, horticulture, and forestry. I must say that in one of the traditional apprenticeship areas, as opposed to the modern ones, I understand that there are three apprentices who want to take over the position of the leader of the National Party immediately after September.

Hon Dr Nick Smith: I seek leave of the House to table the report in the Certified Builders Association

newsletter, stating that less than half of those in the building industry who enrolled in the Modern Apprenticeships scheme actually completed it through to the end and that in fact the vast majority simply bailed out, and the Government’s figures were a fraud.

Document not tabled.

Paul Adams: Did the Minister receive any requests to extend the highly successful Modern Apprenticeships scheme in this year’s Budget round; if so, from whom, and will he consider United Future’s proposal to extend Modern Apprenticeships to 10,000?

Hon TREVOR MALLARD: Yes, I have—I think from the member for Ôtaki, the member from Whanganui, the member for Palmerston North, the member for Rongotai, and, I think, at least one of the Dunedin members approached me. Also, I think someone from United Future approached me. I will certainly look at it.

National Certificate of Educational Achievement—Teacher Workload

8. Hon BILL ENGLISH (National—Clutha-Southland) to the Minister of Education: Has he been advised of a workload study that reportedly says the NCEA is placing increasing strain on teachers with many teachers believing their high workloads constrain their quality of teaching; if so, what action does he intend to take?

Hon TREVOR MALLARD (Minister of Education): I assume the member is referring to the secondary teacher workload study report, which states something different. The report states at page 9: “Teachers generally felt the work involved in implementing the NCEA was becoming more manageable as people were growing more familiar with it.” I commend the report to the member.

Hon Bill English: Can the Minister confirm that one reason that the National Certificate of Educational Achievement (NCEA) provides what the report calls “administrivia” for teachers is that New Zealand Qualifications Authority officials are visiting schools and telling staff they should not use the assessments that are on the Ministry of Education website, because those assessments have not been moderated by the New Zealand Qualifications Authority and they will not be valid for students, and when will he get these two agencies to talk to each other?

Hon TREVOR MALLARD: There has been a considerable amount of discussion between those two agencies recently, including some of it in my office.

Lynne Pillay: What measures has the Government undertaken to improve the quality of teaching?

Hon TREVOR MALLARD: This Government has moved substantially to address the underfunding of teachers. For example, the number of teachers in secondary schools and area schools is 1,679 full-time teachers over and above those required for roll growth in the period of this Government. Budget 2005 introduces an extra 417 teachers. The quality will be improved by the 5 hours non-contact time, which will be in for all teachers—

Hon Bill English: Less teaching!

Hon TREVOR MALLARD: Yes, and more work on preparation. One of the things the member will find useful, even in his political career, is that a little preparation is a good thing; it goes a long way. The total secondary teacher salary bill has increased by 29 percent since we became Government.

Deborah Coddington: In light of a recent Colmar Brunton survey of 1,001 New Zealand parents that showed that 79 percent want schools to offer alternative exams to NCEA, such as International Baccalaureate or Cambridge A levels, and only 31 percent of those parents have confidence in the value of NCEA, why will he not let parents choose and allow schools to dump NCEA?

Hon TREVOR MALLARD: I think there are probably three points to make. The first point is that I do not think that was a survey of parents. I think it was part of a general Colmar Brunton approach, rather than specifically a survey of parents. The second point is that there is already considerable flexibility around alternative examination methods, and that is shown by the fact that both the International Baccalaureate and the Cambridge exams are used extensively through New Zealand I do not think there is any legal obligation for schools to offer NCEA at all.

Hon Bill English: Can the Minister confirm that the Labour Government worked hard to give the impression that it had fixed the New Zealand Scholarship after the 2004 debacle, and can he also confirm that, almost halfway through the school year, the New Zealand Qualifications Authority website today states: “Information relating to Scholarship 2005 will require some modification and will be available once it is confirmed.”; and what does he expect teachers to teach their scholarship students when half way through the year the New Zealand Qualifications Authority has no specifications for it?

Hon TREVOR MALLARD: The curriculum.

Hon Bill English: I seek leave to table the page from the New Zealand Qualifications Authority website making it clear that no information is available on the New Zealand Scholarship.

Madam SPEAKER: Leave is sought to table that document. Is there any objection? Yes, there is.

1080 Poison—Environment Risk Management Authority Reassessment

9. LARRY BALDOCK (United Future) to the Minister of Conservation: What progress, if any, has been made on the formal reassessment of 1080 by the Environmental Risk Management Authority, as initiated by the Department of Conservation and the Animal Health Board, and how many aerial 1080 drops, if any, are scheduled to take place before the reassessment is complete?

Hon CHRIS CARTER (Minister of Conservation): Good progress has been made, and the application by the Animal Health Board and the Department of Conservation is expected to be lodged with the Environmental Risk Management Authority within the next 3 months. The evaluation process may take 6 months or more to complete. I can say that in the current year there will be 33 Animal Health Board aerial 1080 operations to control bovine TB, and five Department of Conservation operations.

Larry Baldock: Can the Minister confirm that the Department of Conservation, along with the Animal Health Board, decided to apply for a reassessment of 1080 back in 2001, in part, and I quote from the department’s own magazine: “Since its registration on 1964, there is new information on 1080 that should be formally assessed.”; if so, why has it taken 4 years for a reassessment to take place?

Hon CHRIS CARTER: This is a controversial topic that has a lot of people very interested in it. I can confirm that the authority has approved its transfer to the Hazardous Substances and New Organisms Act regime. It is important that we have a thorough and credible reassessment for 1080. I have no problem with the time being taken, to ensure that we get it right.

David Parker: Does the Minister have information on the outcomes from some of the recent aerial application of 1080 poison?

Hon CHRIS CARTER: Monitored native bird populations have shown substantial increases after aerial 1080 operations. Possum populations have been drastically reduced, resulting in significant improvements in forest health. Aerial 1080 is also an indispensable weapon in the war against bovine tuberculosis, with the number of infected herds, as at April 2005, reaching a record low level.

Larry Baldock: Will the Minister adopt United Future and Outdoor Recreation NZ’s policy of a moratorium on the aerial use of 1080, until a reassessment has been completed, given that the second reason in 2001 for the reassessment was that, and I quote: “There was strong public interest and concern over 1080, particularly its aerial application.”, and “The ERMA process provides an opportunity for public discussion and scrutiny.”; if not, why not, given the environmental harm it could well be causing in the meantime?

Hon CHRIS CARTER: No, and not one scrap of credible evidence to justify placing a ban has appeared.

Larry Baldock: Is the Minister aware that his department’s own document states, and I quote: “The use of 1080 toxin to control possums for conservation purposes is not preventing the decline in the overall condition of our indigenous forests, and also that 1080 is one of the most effective tools we currently have to restrict the deterioration in biodiversity condition, but only on a relatively small scale. We cannot prevent the ongoing deterioration on a large scale.”, and therefore, will the Minister respond to United Future and Outdoor Recreation’s call for an urgent, all-stakeholder summit involving environmental groups, and including the burgeoning possum recovery industry and recreational hunters, to identify the most effective way to address the pest problem in New Zealand, given the millions being spent every year, with little progress to show for it, in protecting our native birds; if not, why not?

Hon CHRIS CARTER: New Zealand’s biodiversity is under threat from a whole range of introduced pests, not just possums, and I am always interested in hearing about new ways in which we can protect our biodiversity.

Jeanette Fitzsimons: What progress, if any, would be made on pest control or biodiversity if the Department of Conservation were to be disestablished and restructured into two separate units, as advocated by some parties in this House?

Hon CHRIS CARTER: It has been the experience of nearby jurisdictions that have done that, particularly in the state of Victoria, that it has been very unsuccessful, and the two arms of the biodiversity protection agency have been fused back together after such an operation.

Chinese Nationals—Tertiary Study Subsidy

10. Hon BRIAN DONNELLY (NZ First) to the Minister of Education: Did the Rt Hon Helen Clark announce a policy regarding taxpayer-subsidised tertiary study for Chinese nationals last week; if so, what is the total estimated annual cost to the taxpayer of such a scheme?

Hon TREVOR MALLARD (Minister of Education): No.

Hon Brian Donnelly: Will the partners of foreign students using the taxpayer-funded package announced by the Minister in India and repeated by the Prime Minister in China automatically be able to work in New Zealand, will their children be able to have fully subsidised education within our schooling system, and what is the total estimated annual cost to the taxpayer of this scheme?

Hon TREVOR MALLARD: I do not have the breakdown of figures for China. The member is aware that this scheme is to allow doctoral students to work with leading researchers in New Zealand in order to boost our science and other research—something that is for the good of New Zealand. It is not restricted to China; even the member’s friends from the United States, England, Europe, and other white countries can come. The total cost to the taxpayer over 4 years will be slightly under $15 million. That is a very cheap price for a lot of very good research.

Hon Brian Donnelly: Why should New Zealand taxpayers fund tertiary courses for students from other nations, including oil-rich nations such as Saudi Arabia, when our own students are having to put themselves into considerable debt in order to receive a tertiary education, and does he not realise that New Zealand’s education system is for New Zealanders first?

Hon TREVOR MALLARD: I reject the member’s xenophobic approach to life. I want to make it clear that, firstly, these are not courses. They are research programmes; they are doctorates. Secondly, I want to make it clear to the member that they are not free to the people who are coming. All we are saying is that in order to get these wonderful people to come to New Zealand to study with our leading researchers we will charge them the same as Kiwis. Many countries around the world pay people a fortune to come.

Families Commission—Former Chief Executive

11. JUDITH COLLINS (National—Clevedon) to the Minister for Social Development and Employment: Does he stand by the statement on his behalf in the House in relation to the golden handshake paid to the former Families Commission chief executive that he “was first advised on 13 April that Claire Austin was leaving, and that her departure involved a payout, and that this payout was confidential. By then the commission and Claire Austin had reached a legally binding agreement.”; if so, why?

Hon STEVE MAHAREY (Minister for Social Development and Employment): Yes, because it is an accurate account of events. I would add, as Ruth Dyson did on my behalf at the time of the statement the member cites, that I had been aware that there had been a serious breakdown in the relationship between the chief executive and the commissioners since 22 February.

Judith Collins: Why did he tell the House that he did not know that Claire Austen was to get a golden handshake until after the payment became legally binding, when, in fact, he knew that it was likely at least 4 days beforehand when he met the Ministry of Social Development’s chief executive on 7 April; and why did he not make it plain to the Families Commission that a secret golden handshake must not be given?

Hon STEVE MAHAREY: The sequence of events is that the agreement was not concluded until after working hours on Monday, 11 April. There was no contact with myself or the Ministry of Social Development on 12 April, as the commission was executing a formal agreement and agreeing with the outgoing chief executive on messages for the commission’s staff, etc. That was not completed by the mediator and the commission’s lawyers until the morning of 13 April. The chief executive of the Ministry of Social Development alerted me as soon as he became aware of the settlement, which was when the chief commissioner advised me at approximately 1 p.m. and 35 seconds and 3 milliseconds on Wednesday, 13 April. If the member would like anything else, she is most welcome to it, because everything is on the Table.

Georgina Beyer: Why is there a need for the Families Commission to provide an independent voice for families?

Hon STEVE MAHAREY: United Future put forward that policy as a valuable function because there is always a possibility that a Government may short-change the interests of families for short-term political advantage. That has been illustrated at times by previous Governments cutting benefits, selling people’s homes to reduce the State housing stock, and starving family support services of funding. Similarly perhaps, cancelling half of the Working for Families package would have the same kind of impact on families, and I think that United Future was hopeful that that kind of attack on the New Zealand family would never happen again.

Judith Collins: Does the Minister expect this House to believe that, knowing as he did of the serious employment situation at the Families Commission, he did not raise or discuss that matter with the chair of the commission when the commission met on 7 April 2005; if he does, whom does he blame for that glaring omission of responsibility?

Hon STEVE MAHAREY: In answer to the first question, yes, and expectations were set out clearly by the Ministry of Social Development throughout that process. That is the answer to the question.

Judith Collins: What possible reason would the Minister have had to meet the chair of the commission without the chief executive being present, unless the meeting was, at least in part, to discuss the chief executive’s employment and the ramifications of that for the commission and the Minister?

Hon STEVE MAHAREY: There were a number of reasons to meet the Families Commissioner—to talk about the business of the commission being one of them.

District Health Boards—Deficits

12. HEATHER ROY (ACT) to the Minister of Health: Does she stand by the reported assurance she gave the Health Committee in 2002 that she was aiming at a deficit that was “close to zero” within 3 years, and what is her explanation for the projection of district health board deficits of $100 million for 2005-06 and similar deficits for 2006-07?

Hon ANNETTE KING (Minister of Health): Yes, and this continues to be the Government’s aim. The Minister of Finance and I have not agreed to projected deficits of $100 million for 2005-06 and similar deficits for 2006-07. We have agreed to a sector deficit of $13.4 million for 2005-06.

Heather Roy: Can the Minister understand why people are calling her the most incompetent Minister of Health we have ever had, when she is using up an extra $3 billion of taxes to give New Zealanders the same health services they had 6 years ago, when 180,000 people are on waiting lists, and when district health board deficits are blowing out to $100 million?

Hon ANNETTE KING: No, I have not heard those comments—although I have heard people in this building comment that the member who called the flu vaccine “dodgy” was recently seen having one.

Dianne Yates: Has the Minister seen any recent media statements relating to the financial performance of the district health boards; if so, what have they said?

Hon ANNETTE KING: Yes, I have seen two statements. Firstly, the Ministry of Health released a statement on 24 May advising that the Ministry of Health continues to see evidence that district health boards are generally managing well their financial statements. Secondly, Statistics New Zealand issued a statement on 25 May entitled “District Health Boards Report Operating Surplus”. That media release advises that the combined operating surplus of New Zealand’s 21 district health boards was $29.3 million for the March 2005 quarter.

Dr Paul Hutchison: How do the Minister’s assurances of a deficit “close to zero” correlate with the stark reality of the Auckland District Health Board’s predicted deficit of $83 million; and, given that huge deficit, is it not the reality that for many of the 1,405 patients who have been waiting for over 6 months, having been given a commitment that they will have surgery, that commitment will be broken—just it was for the 2,000 patients Labour culled from the Counties Manukau district?

Hon ANNETTE KING: I direct the member to the chairman’s foreword in the Auckland District Health Board’s district annual plan for 2004-05, in which he stated that it needed to be admitted that the bulk of the construction programme entered into several years ago had not delivered the savings that had been promised. The savings have come nowhere near the $80 million of savings promised in 1999. But I am pleased to tell the House that the Auckland District Health Board, even with that problem it inherited, is working through its deficit. It is doing extremely well in terms of getting that deficit down, and I am pleased with that. However, it will not be helped under the first National Party health policy, which was released last night, in which, in relation to what would happen to people who are waiting for an operation, Dr Hutchison stated that the National Party would put them on a list.

Judy Turner: Does the Minister agree that when many district health boards are bogged down with the massive costs of providing locums to cover shortages of at least 1,440 general practitioners and 83 house surgeons nationwide, the responsibility for their ongoing deficits actually sits squarely on her shoulders, in light of the recent Health Workforce Advisory Committee report that states that after 6 years of her overseeing health workforce development there is a total lack of leadership and supporting infrastructure, which should have been provided by the Ministry of Health?

Hon ANNETTE KING: I am very pleased that there is leadership in health workforce planning now, and that that was recognised in the Health Workforce Advisory Committee’s report, because one of the things this Government has done is to increase the number of doctors in training by 40 more a year. We had seen no increase there since 1981. The member is right that we do face a problem in being able to provide health services in New Zealand, because of a constant shortage of health workers. That is why so much emphasis is being put on increasing the number of people training as doctors, nurses, radiation therapists, and dental therapists, and in many other areas—because one cannot provide a health service without them. We are committed to making sure we get them. We cannot get them overnight.

Heather Roy: What responsibility will the Minister take for the fact that at the end of March there were 61,000 people on her booking-system waiting list for surgery, and another 120,000 on her other waiting list for a first specialist assessment, when she described 96,000 people being on waiting lists as “criminal” when she was in Opposition; and for these increasing numbers despite her unbelievable injections of billions of extra taxpayers’ dollars into health?

Hon ANNETTE KING: I will take responsibility for the 40,000 more a year medical and surgical discharges from our hospitals. I will take responsibility for the 27,000 extra day-surgery procedures now being undertaken. I will take responsibility for the 100,000 outpatient services we are receiving. All of those are extra to those in 1999. In addition, those who have been booked will have an operation, which is something they could not have been guaranteed when they sat on a list—the National Party’s new policy—and waited and waited.

Heather Roy: How, despite receiving an extra 40 percent of taxpayers’ dollars, has the Minister managed to deliver just 1.3 percent more operations, according to the Health and Independence Report of the Ministry of Health last year, which is actually a cut of 3 percent when population growth is taken into account; and how on earth did she convince the Minister of Finance, against Treasury’s contrary advice, to give her another $1 billion in return for exactly the same health services?

Hon ANNETTE KING: Firstly, the Ministry of Health advised the member that not all procedures were reported in the Health and Independence Report. Secondly, over half a billion dollars will be going to pay nurses’ salaries—and I can only assume that ACT does not want to pay nurses more. I say to the member for United Future that if one wants to have a nursing work force, one has to pay nurses to keep them in New Zealand. Half a billion dollars goes to that. Also, over $100 million has gone to taking away asset testing, which was something that many people thought was unfair. We have also seen money going into primary health care to reduce the cost of visits to the doctor. All up, I believe that that is good expenditure of money, and people see good progress.

Heather Roy: I seek the leave of the House to table an article from New Zealand Doctor magazine in 2002, in which, when tackled about the growing deficits of district health boards, the Minister said: “Don’t worry; it will all be OK in about 3 years’ time”.

Madam SPEAKER: Leave is sought to table that document. Is there any objection? There is.

Judy Turner: I seek the leave of the House to table two articles from the Sunday Star-Times of 5 June about locum doctors’ costs.

Madam SPEAKER: Leave is sought to table those articles. Is there any objection? There is.

Dr Paul Hutchison: I seek the leave of the House to table the elective services performance indicator of May 2005.

Madam SPEAKER: Leave is sought to table that document. Is there any objection? Yes, there is objection.

Hon Annette King: I seek leave to table a transcript of last night’s Television One news, in which Dr Hutchison stated that the National Party’s policy was to put people on a list.

Madam SPEAKER: Leave is sought to table that transcript. Is there any objection? There is.

Question No. 11 to Minister

JUDITH COLLINS (National—Clevedon): I seek the leave of the House to table some documents in relation to question No. 11. The first is a time line headed “The Claire Austin Timeline” detailing the series of events, from questions and answers given to and received from the Minister.

Leave granted.

JUDITH COLLINS: I seek the leave of the House to table the answer to question for written answer No. 6434.

Madam SPEAKER: Leave is sought to table the answer to that question. Is there any objection? Yes, there is.

JUDITH COLLINS: I seek the leave of the House to table question for written answer No. 6051 and its answer.

Madam SPEAKER: Leave is sought to table that. Is there any objection? Yes.

JUDITH COLLINS: I seek the leave of the House to table question for written answer No. 6265 and its answer.

Madam SPEAKER: Leave is sought to table that document. Is there any objection? Yes, there is.

JUDITH COLLINS: I seek the leave of the House to table question for written answer No. 6266 and its answer.

Madam SPEAKER: Leave is sought to table that document. Is there any objection? Yes, there is.

Questions to Members

Health Committee—Estimates Consideration

1. RODNEY HIDE (Leader—ACT) to the Chairperson of the Health Committee: Is the committee meeting to discuss the 2005-06 estimates: Vote Health; if so, when?

STEVE CHADWICK (Chairperson of the Health Committee): Yes, on 8 June.

Rodney Hide: Has the committee had any advice from officials about the Minister of Health promising the committee in 2001 that the district health board deficits would be eliminated over 3 years—that is, by now—and the budget forecast for the deficits to balloon out to $100 million; if so, what will the committee do about it?

STEVE CHADWICK: Not at the deliberations on the 2005-06 estimates.

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